Firefly Energy gives up battery business

Firefly Energy Inc. filed for Chapter 7 bankruptcy Friday, and both the city of Peoria and Peoria County will likely pursue legal action to regain the $6 million the governments loaned the start-up in 2007.

By LAUREN REES

Journal Star

By LAUREN REES

Posted Mar. 13, 2010 at 12:01 AM
Updated Mar 13, 2010 at 12:01 PM

By LAUREN REES

Posted Mar. 13, 2010 at 12:01 AM
Updated Mar 13, 2010 at 12:01 PM

PEORIA

Firefly Energy Inc. filed for Chapter 7 bankruptcy Friday, and both the city of Peoria and Peoria County will likely pursue legal action to regain the $6 million the governments loaned the start-up in 2007.

County Board Chairman Tom O'Neill confirmed the company's bankruptcy filing. Ed Williams, Firefly CEO, could not be reached for comment.

The city and county guaranteed a $6 million loan to the company in May 2007. In a news release issued jointly by County Administrator Patrick Urich and City Manager Scott Moore, both said the city and county could lose their loan "in the worst case."

However, "in the likely case, the governments will pursue by legal means the pledged collateral, the physical and intellectual assets of Firefly Energy Inc., to reduce any investment losses that may be realized by the city and county," the news release said.

"The city and county intend to exercise their full rights to protect the interest of the tax payers of the city and county of Peoria," the release said.

Firefly also received a $7 million development contract from the U.S. government in 2007, followed by a $2 million grant from the U.S. military in 2008.

The high-tech start-up company was founded in 2003 by Williams and Mil Ovan, who was senior vice president. The company developed and manufactured a lighter, powerful lead-acid battery, replacing lead plates with graphite foam.

The company laid off 15 people in June amid the struggling economy, and Ovan left in February.

The two governments partnered to provide support to Firefly so the company would expand - and stay - in Peoria.

State Rep. David Leitch, R-Peoria, told the Journal Star before the loan was finalized that officials wanted Firefly to stay in the area. He said Friday he knew the company had been "close to some financial situation for some time," but didn't know what that situation was.

State Sen. David Koehler, D-Peoria, sponsored legislation in November expanding the Illinois Finance Authority's bonding authority for renewable energy projects. At the time, he told the Journal Star that Firefly could benefit from the law.

"It's a shame (Firefly filed for bankruptcy)," he said. "Last I heard, I talked to the CEO last year and they were very optimistic on some of their new technology," he said.

Nine CityLink buses installed Firefly's Oasis batteries in March 2009. Prototype Oasis batteries were also installed in four Freightliner trucks operated by G&D Integrated in Morton in late December 2008.

The batteries cost about $450 each, compared with CityLink's average battery cost of $146.

"Unfortunately, after three years of extensive efforts to make a commercially-viable alternative to the traditional lead-acid battery, Firefly has not been successful," the news release from the city and county said.